MANILA, Philippines - A tighter supply of nickel ore is likely to continue in 2016 as some nickel miners in the country have reduced and even shut down operations.
Global Ferronickel Holdings Inc., chairman Joseph Sy said nickel miners have significantly lowered their production amid low prices of nickel ore in the market.
The Philippines have been exporting more than 50 percent of low grade ores to China since the Indonesian export ban in January 2014.
“However, importations by China of low grade ores have dropped significantly this year owing to the lack of supply brought about by the very low prices of iron ore,” he said.
Following tighter supply of nickel ore from the country, some smelters in China would also be forced to reduce production or even shut down operations.
Furthermore, there was also a tight supply of medium grade ores due to low nickel prices.
Sy predicted the price of medium grade ore would likely fall below $20 per wet metric ton. At the London Metal Exchange (LME), the world center for industrial metal trading, nickel price continues to hover below $10,000 per ton.
“More nickel miners would not survive as some of them have operating costs beyond $20 per wet metric ton because of longer hauling distances,” Sy explained.
Likewise, high grade ores will continue to be scarce as this represent only about 15 percent of Philippine nickel exports.
“The price is also relatively low and there is no practical advantage of buying high grade ores from the Philippines as it is relatively cheaper to process medium grade ores,” he said.